A hedge fund manager who is dealing with claims from the US Securities and Exchange Commission that he has deceived investors by steering higher fees to the John Thomas Financial Inc brokerage filed a case in order to halt a hearing by the agency, Bloomberg reported.
Manager George Jarkesy Jr said that if the administrative proceeding by the regulator should push through, his right to due process and equal protection as enshrined in the US Constitution would be violated. Jarkesy Jr is facing a possible $100 million fine and could even be banned from the securities industry based on the SEC complaint, the report said.
In his complaint filed in a Washington federal court, Jarkesy questioned the agency's ability to be fair. He said that by unveiling findings that allow conclusions to be drawn about Jarkesy and Patriot 28 Ll, which was formerly called John Thomas Capital Management Llc, before adjudication and without allowing plaintiffs to give evidence or defenses, "the SEC has removed all doubt about its ability to serve as a fair tribunal," Bloomberg reported.
In March, the SEC alleged that Jarkesy and John Thomas Capital Management Founder and Chief Executive Officer Anastasios "Tommy" Belesis had defrauded the investors of the company. Belesis agreed to a securities industry ban in a settlement with the SEC in December, the report said.
The regulator said in a statement in March that Jarkesy made investors believe that as fund manager, he made all investment decision. However, the SEC said that Belesis would sometimes take the place of Jarkesy in managing the fund and that he channeled money from it to a firm he held an interest in. The SEC alleged that Belesis bullied Jarkesy into paying John Thomas Financial with substantial and unjustified fees. Jarkesy also appears in media often as a commentator and talk show host, the report said.
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